Dave Says - June 3, 2013

Too late for life insurance?

Dear Dave,Is it ever too late to get life insurance?Tiffany

Dear Tiffany,The only time it’s really too late to get life insurance is after you’re dead! But seriously, if you’re older than 70 it becomes pretty difficult to get affordable coverage, because insurance companies figure you’ve pretty much got one foot in the grave already at that point.

You can get term life insurance pretty easily up until about age 70, and there are a few policies available past that point, depending on your health situation. But you really shouldn’t need life insurance when you’re that age and older. Hopefully, you’ve invested, saved, and set aside enough money to pay burial expenses and for a spouse—if you have one—to live on after you’re gone.—Dave

Is it in the will?

Dear Dave,My father is terminally ill, and my two brothers and I recently had a talk with dad about his estate. He wants everything, except his house, left to us. He would like it to go to his long-time girlfriend, but it’s not written that way in the will. Should we have the will changed to reflect this desire?Dan

Dear Dan,I’m really sorry about your dad. I know this isn’t easy for you guys, but I’m glad you’re all working together to make things right. Yes, the will needs to be changed to reflect his wishes where the house is concerned. If he is still of sound mind and able to make that decision independently, the will should describe exactly what he wants to happen with every piece of his estate.

There is an alternative though. It’s fine if he simply wants to give her the house. But he could also leave her a life estate that says she gets the use of the home as long as she’s alive. Then, upon her death, it would revert to you. Essentially, the house would be left to you, but she would have use of it during her life.

This is a more traditional approach in these kinds of situations, but it’s your dad’s will and his estate. He can do whatever he wants. But remember, if he deeds the house to you and you give it to her, you’ll have a gift-tax situation on your hands. You don’t want to get into that mess!—Dave

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